Image source @ Visual China

Wen qu Jie business, author Wen Hui

only two days after the public test was started, Jinshan office (688111.SH) apologized late at night for the query that "user documents are used for AI training.

on November 16, Jinshan office announced that its artificial intelligence office application "WPS AI" was launched for public testing, and AI functions were gradually opened to all users. However, some netizens said that the WPS Privacy Policy mentioned that "we will use the document materials you upload voluntarily as the basic materials for AI training after desensitization"; Jinshan Office was questioned about the privacy of users, which caused widespread concern at that time.

in response, WPS official microblog responded at 23:30 p. m. on November 18, while apologizing to users, stated that "all user documents will not be used for any AI training purpose, nor will they be used in any scenario without the consent of users" .

Image source: Weibo screenshot

although Jinshan office has updated the WPS privacy policy, users do not seem to be at ease. some netizens have issued comments such as "if you don't train users, you can't know" and "if you don't train AI with user documents, what do you use to train AI. Some netizens also tweeted: " what we pay for is your service, not for your service!"

Image source: Weibo screenshot

In fact, this is not the first time WPS has been involved in a "privacy controversy".

in mid-July 2022, WPS was suspected of infringing on users' privacy because it was revealed that it would delete users' local files, and was on the microblog search list. At that time, WPS responded that "an online document link shared by a user is suspected of violating the regulations. We have prohibited others from accessing the link according to law. This matter was falsely reported as WPS deleting the user's local files". Equivalent, the action performed by WPS is "lock text", not "delete".

Although the incident has been clarified, WPS has been involved in privacy disputes twice before and after, which will still have a certain impact on its trust value in the user group.

in particular, since the launch of WPS AI, the first class of Chat GPT application on the domestic collaborative office track in April, Jinshan office has been reporting high expectations for it. It is not only a "chip" for Jinshan Office and Microsoft and other giants to compete on the AI office track, but also a "good story" that drives Jinshan Office's share price up under the stimulation of AI concept ".

It can be said that it is a pity that "WPS AI" did not succeed. When can the "trust crisis" caused by this incident be eliminated? Will it have a joint impact on the future development of Jinshan Office AI products? These issues need to be questioned for the time being.

01

Jinshan Office

Without WPS AI?

Obviously, today's Jinshan office is in great need of "WPS AI", whether it is for competition, revenue, or the future.

In March this year, Microsoft announced at its annual Build developer conference that it would add an AI assistant called Copilot to Windows 11. After a month, Jinshan Office officially released "WPS AI"; Later, in order to grasp the opportunity of the rise of AI concept and not lag behind others in the AI office era, Jinshan Office also continuously promoted the progress of the product.

on may 16, Jinshan office began to demonstrate the capability of "WPS AI", introducing that the product is similar to Microsoft's Copilot capability, and saying that it will access daily office components such as forms, text, PPT, PDF, etc. At the "2023 world artificial intelligence conference" held on July 6, Jinshan office not only appeared with "WPS AI" in due course, but also directly launched the WPS AI website, recruit users as smart office experience officers.

a series of actions have demonstrated the ambition of Jinshan office "all in AI". when the results were released in the first quarter of this year, lei jun, chairman of Jinshan software, also made it clear that in the face of technological changes brought about by generative artificial intelligence and large language models, Jinshan office will focus on the field of artificial intelligence .

thanks to the appearance of AI products, the pricing of Jinshan office (688111.SH) in the secondary market has also "gone up". According to Soochow Securities, the highest market value of Jinshan Office in 2023 was 244.4 billion yuan, up 69.74 percent in the first quarter, while the last significant increase was 69.2 percent from November 2020 to January 2021. as of November 20, the total market value of Jinshan office was about 151 billion yuan.

But in the process of the rapid growth of Jinshan Office's share price, some major shareholders have chosen to reduce their holdings at a high level. on April 18, the day Jinshan office announced "WPS AI", Jinshan office issued a shareholder plan reduction announcement on the Shanghai stock exchange, saying that "WPS hong kong and qiwen nwei (referring to a total of 10 enterprises from qiwen one-dimensional to qiwen ten-dimensional) have accumulated 21,836,531 shares of the company through inquiry transfer, bulk trading and centralized bidding, accounting for 4.73 of the company's current total share capital". According to the semi-annual report of Jinshan Office, in the first half of this year, the top six shareholders of Jinshan Office collectively reduced their holdings, totaling nearly 19.65 million shares.

Image source: Company announcement

Image source: Company announcement

according to the information of oriental wealth network, on October 13, Jinshan office (688111.SH) was reduced by 167300 shares of Shanghai stock exchange, and has been reduced by Shanghai stock exchange for 13 consecutive days, totaling 2.4498 million shares, with the latest holding of 16.1548 million shares, accounting for 3.50 of the total share capital of a shares of the company.

Regarding the reduction of shareholder holdings, on the same day, Jinshan Office responded on the interactive platform, "The reduction of the company's major shareholders is due to the consideration of facing new opportunities and challenges of artificial intelligence and making good capital reserves. There is currently no next reduction. plan."

In addition to the "benefits" brought by the rise in stock prices and the reduction of major shareholders' holdings, the main reason for Jinshan Office's re-investment of "WPS AI" is still due to the needs of business development.

according to Jinshan office's financial report for the third quarter of 2023, during the reporting period, Jinshan office's operating income was 1.098 billion yuan, up 9.4 percent from the same period last year. Net profit attributable to the parent was 0.294 billion yuan, up 0.18 percent from the same period last year. Among them, the subscription and service business still plays the main engine driving Jinshan office revenue. During the reporting period, its domestic personal office service subscription business achieved operating income of 0.649 billion yuan, accounting for nearly 60% of the total revenue in the third quarter; domestic institutional subscription and service business achieved revenue of 0.248 billion yuan, accounting for about 22.6 of the total revenue in the third quarter.

In terms of major products, as of September 30, WPS Office Mobile had the 0.327 billion number of monthly active devices, down 2.68 percent year-on-year, the third consecutive quarter of decline this year.

Image source: Company announcement

this shows the importance of "WPS AI" facing the market and commercial landing : first, with the full popularity of AI office today, Jinshan office needs to provide relevant services to individual subscription and institutional subscription customers with a "revenue share" of 80%, so as to keep the existing industry share from being eroded by other competitors; Second, mobile monthly life has declined, it also reflects that WPS needs more new features to attract customers, and AI is undoubtedly the most important part.

02 Technical strength and product strength still need to be polished carefully

Since "WPS AI" is so important to Jinshan Office, what has it done in the past six months?

The first thing that makes people puzzled is the "swing" between Jinshan Office's cooperation and self-research ". previously, Zhang Qingyuan said to the outside world that he would mainly cooperate with external technologies to build AI office products. "in the first way, we will choose to cooperate with technical service providers to develop AIGC products through their technical empowerment. The second way is in the form of investment. Some start-up companies are very good, and we are also in continuous contact".

when Jinshan office officially released "WPS AI", it also introduced to the public that "WPS AI" was made by a large model provided by domestic partner MiniMax. From the subsequent public information, it can be seen that Jinshan Office has also cooperated with a common large model platform such as Wenxin Yiyan and Zhipu AI.

Image source: Jinshan Office Weibo

but in the "technology open day" activity in September, Jinshan office changed its previous "tone" and announced: "WPS AI chooses the hybrid deployment model, cooperates with many large model manufacturers in China, and supplements it with self-developed models".

Obviously, for Jinshan Office, the self-developed large model is a "must-go road", but this road is slower. As early as 2019, Jinshan Office mentioned the concept of "artificial intelligence in the office field" in its prospectus. it can be seen that Jinshan office did not smell AI tuyere early, perhaps because the pace of self-research was too slow, it had to choose cooperation and self-research "walking on two legs".

However, judging from the previous open use effect, the cooperative external technology does not seem to bring the ideal effect to "WPS AI. There is no shortage of users who have tested the software and think that the "experience is not good", such as errors in the AI document proofreading function and the computer-side AI function cannot be found. this time "WPS AI" has just opened a public test, and exposed the issue of "privacy policy", which to a certain extent also shows that this product still needs to be "polished".

Image source: WPS official community screenshot

It is understood that the current applicable laws to protect generative AI from infringing on user privacy mainly include: the the People's Republic of China Cyber Security Law, the the People's Republic of China Data Security Law, and the the People's Republic of China Personal Information Protection Law. In addition, at the level of departmental regulations, there are mainly "Interim Measures for the Management of Generative Artificial Intelligence Services", "Internet Information Service Algorithm recommend Management Regulations", "Internet Information Service Deep Synthesis Management Regulations" and so on.

"WPS AI" should properly manage itself on the premise that laws such as generative AI do not infringe on users' privacy and security are relatively comprehensive. If the issue of "involving user privacy" is involved, it is really difficult to say whether the market value of Jinshan office more than 150 billion can be supported.

03 track giants are surrounded, WPS AI is full of challenges

For the current "WPS AI", in addition to internal improvement, it also needs external "defense".

on October 17, at the Baidu world conference 2023, Baidu's "family bucket" featured a new AI function. Among them, the intelligent office platform "new as flow" reconstructed by AI has the functions of group chat message "1000 messages, one second focus", one-key travel, data generation, etc.

Image source: screenshot of Baidu Ruliu official website

on November 1, Microsoft Windows that the 11 PC operating system will undergo a major update, and the new version will include an AI chat robot called Copilot. Equivalent, computer users of Windows systems will henceforth have a ChatGPT-like experience with AI assistants, simply speaking and giving instructions, Copilot creating human-like text and other content.

on November 3, DingTalk AI magic wand was officially launched, covering 17 products such as DingTalk chat, documents, knowledge base, brain maps, flash notes, Teambition, etc., and 60 + scenes were fully open for testing...

The frequent new developments in the industry directly reflect the fact that today's AI office market has long been full of strong enemies, and Jinshan Office is no longer the only competitor facing Microsoft.

overseas, Notion launched Notion AI function at the end of February this year, providing a series of functions including brainstorming, blogging, creating outlines, managing social media, writing academic papers and summarizing research.

and Microsoft also released the Microsoft 365 Copilot of AI office assistants supported by GPT-4 platforms as early as March. By May, 600 large organizations were using its paid early adopter version.

in July, Microsoft announced that in addition to the existing subscription charges for Microsoft 365 Copilot, it will charge $30 per month for each user who uses the enhanced version of Copilot Microsoft 365.

the domestic AI office market is also "unstoppable". DingTalk, backed by Alibaba's big model and impression notes, there is also "impression AI". feishu has already introduced "My AI" office assistant. However, when Jinshan Office and giant players such as Microsoft and DingTalk "open the book", it is really not certain who loses and who wins.

photo source: impression notes official website

Previously, "First Financial YiMagazine" analyzed in its report: "At present, the number of paid commercial users of Office 365 has reached 0.37 billion. With the blessing of GPT, Microsoft may get more revenue from the office business. Credit Suisse estimates that if 10% of existing paying users are willing to upgrade to the Copilot version, it will generate $14.9 billion in revenue over the next five years. Assuming Microsoft also charges more for the simplified version of the new feature, it can add an additional $18.7 billion."

In this regard, Microsoft CEO Nadella revealed at a recent performance call that Microsoft has more than 100 million paid Copilot users. In the third quarter, the number of companies subscribing to the Copilot commercial edition surged 40% from the second quarter, making a major breakthrough in markets outside the United States.

For DingTalk, there is no need to worry about the future commercialization prospects of its AI office. Data show that by the end of 2022, the number of DingTalk users has exceeded 0.6 billion, the number of enterprise organizations has exceeded 23 million, the total number of ecological partners has exceeded 4000, and the number of applications on DingTalk open platforms has exceeded 1100. Such a "mass base" itself means influence and pricing power.

In any case, when the "wheel" of AI comes, Jinshan Office can only be carried forward. The only difference is that in the era of mobile office, it is the "king"; but in the era of AI office, this result has become unknown.

Resources

1. "Feed" the big model with user documents? WPS Apologies: All User Documents Will Not Be Used for AI Training, Science and Technology Board Daily 2, Apologies! WPS updates privacy policy, user documents will not be used in any scenario without consent ", beijing business today 3," Beijing Jinshan Office Software Co., Ltd. Announcement on the Results of Shareholding Reduction of Controlling Shareholders and More than 5% Shareholders ", Securities Daily 4, Jinshan Office: The reduction of major shareholders of the company is due to the consideration of facing new opportunities and challenges of artificial intelligence and making good capital reserves. At present, there is no further reduction plan.